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An analysis of revisions in Indian GDP data

Author

Listed:
  • Amey Sapre

    (National Institute of Public Finance and Policy)

  • Rajeswari Sengupta

    (Indira Gandhi Institute of Development Research)

Abstract

In this paper we study revisions in the annual estimates of India's GDP data. The objective of our analysis is to understand the revision policy adopted by the Central Statistical Organisation (CSO) and the issues therein. Using historic data, we study the magnitude and quality of revisions in the aggregate as well as the sectoral GDP series. We analyze the computation of the sectoral revised estimates and compare the extent of revision in growth rates from the first release to the final estimate. To understand the magnitude of revisions, we compute the standard deviation of revisions in growth rates for each sector and use that to build confidence bands around the initial estimates. The confidence bands provide a means to understand the extent of variation in the final growth rate estimate, and at the same time, provide a mechanism to contain revisions. Based on our analysis, we highlight some of the major issues in CSO's revision policy. We outline possible solutions that can be implemented to improve the quality of GDP data revisions. We identify sectors with large variations in growth rates and argue that improving or changing the low quality indicators can help contain growth rate revisions and enhance the credibility of the estimates.

Suggested Citation

  • Amey Sapre & Rajeswari Sengupta, 2017. "An analysis of revisions in Indian GDP data," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2017-015, Indira Gandhi Institute of Development Research, Mumbai, India.
    • Handle: RePEc:ind:igiwpp:2017-015
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    References listed on IDEAS

    as
    1. N. Gregory Mankiw & Matthew D. Shapiro, 1986. "News or Noise? An Analysis of GNP Revisions," NBER Working Papers 1939, National Bureau of Economic Research, Inc.
    2. Datta, Pratik & Surya Prakash B. S. & Sane, Renuka, 2017. "Understanding Judicial Delay at the Income Tax Appellate Tribunal in India," Working Papers 17/208, National Institute of Public Finance and Policy.
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    Cited by:

    1. Arvind Subramanian, 2019. "India's GDP Mis-estimation: Likelihood, Magnitudes, Mechanisms, and Implications," CID Working Papers 354, Center for International Development at Harvard University.
    2. Acharya, Viral & Bhadury, Soumya & Surti, Jay, 2020. "Financial Vulnerability and Risks to Growth in Emerging Markets," CEPR Discussion Papers 14962, C.E.P.R. Discussion Papers.
    3. Hazarika, Bhabesh, 2017. "Decomposition of Gender Income Gap in Rural Informal Micro-enterprises: An Unconditional Quantile Approach in the Handloom Industry," Working Papers 17/216, National Institute of Public Finance and Policy.
    4. Radhika Pandey & Amey Sapre & Pramod Sinha, 2018. "What does the new 2011-12 IIP series tell about the Indian manufacturing sector?," Indian Growth and Development Review, Emerald Group Publishing Limited, vol. 11(2), pages 90-106, October.

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    Keywords

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    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General

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